Japan’s Nippon Steel acquires US Steel for $14.9 billion

Japan’s Nippon Steel has acquired a deal to buy US Steel for $14.9 billion in cash, prevailing in an auction for the 122-year-old iconic steelmaker. Other rivals involved into buying the historic company were ArcelorMittal and Cleveland-Cliffs.

Clevaland-Cliff’s move prompted US Steel to launch a sale process. In a meeting of its board of directors on Sunday, US Steel deemed Nippon’s offer superior to a sale to Cleveland-Cliffs, which had raised its bid in the high of $40 per share range, as per the sources.

Reuters reported that US Steel was also pursued by ArcelorMittal. Similar to Nippon, it also owns a plant in Alabama that manufactures steel sheet products by processing semi-finished products, or slabs, procured from local and overseas suppliers. They are also investing about $1 billion in an electric arc furnace.

The acquisition of US Steel will help Nippon move towards 100 million tonnes of global crude steel capacity, while significantly expanding its production in the United States, where steel prices are expected to rise following the ramped up production by automobiles manufacturers post reaching deals with unions to end strikes.